Issues | Labor Relations

Abandoning the wishes of Sam Walton, the current leadership in Bentonville does not respect their workers or contribute to a family-like atmosphere so championed by their founder. Regulations and fines have failed to slow Wal-Mart, who uses its massive profits to circumvent problematic bureaucratic oversight. Wal-Mart’s “sweetheart” deal with the Department of Labor, exposed by the Department’s Office of Inspector General, further highlights the retailers willingness to skirt responsibility over the welfare of its workers, including teenage employees.

On December 23, 2008, Wal-Mart announced that it would settle 63 wage and hour class action lawsuits that have been pending against the company for several years. That number represents approximately 86% of the 73 wage/hour and overtime class actions currently pending against Wal-Mart. What these cases have revealed through evidence and employee testimony is a "corporate culture" and systematic approach geared towards cutting labor costs, by dictating managers hire below the "preferred" staffing levels and rewarding managers for keeping labor costs down. It has been suggested that Wal-Mart's motivation for settling these lawsuits is not simply to avoid costly defeats in the courtroom, but to tie up issues that might be used by supporters to argue for passage of the Employee Free Choice Act.

Wal-Mart Wage and Hour Settlement (PDF) 

Ignoring Labor Laws

State and federal regulators have hit Wal-Mart for violating rules on work hours and leave:

• Wal-Mart Violated Worker Rights More than 2 Million Times, Minnesota Judge Rules Wal-Mart violated the law more than 2 million times over a six-year period by denying workers time for breaks and forcing them to work "off the clock" for no pay, a Minnesota judge has ruled. Dakota County District Judge Robert King ordered the company to pay $6.5 million in back pay. In addition, Wal-Mart faced fines as high as $2 billion for the wage-and-hour violations. The case ultimately ended in settlement, with Wal-Mart paying out $54 million in lost wages. [Workday Minnesota, 7/2/08; Associated Press, 12/9/08]

• Family Leave Laws. Wal-Mart has received numerous fines for violating the Family and Medical Leave Act in locations all over the country -- firing workers while on federally protected medical leave. In 2005, Wal-Mart was fined $188,000 by the California Fair Employment and Housing Commission for violating California state law by failing to reinstate a woman after she completed her maternity leave. [U.S. Department of Labor, via Freedom of Information Act; California Department of Fair Employment and Housing, case no. E 200203 M-0774-00-pe, C 03-04-026; Sacramento Bee, 6/14/05.]
• Off-the-Clock Work. In 2000, Wal-Mart paid $50 million to settle a lawsuit that involved 69,000 workers in Colorado who had allegedly been forced to work off the clock. In 2002, a federal grand jury in Oregon found Wal-Mart employees were forced to work off the clock and awarded back pay to 83 workers. In December 2005, Wal-Mart was ordered to pay $172 million to 116,000 current and former California workers for violating a 2001 state law that requires employers to give 30-minute, unpaid lunch breaks to employees who work at least six hours. In the United States, Wal-Mart has 53 class action lawsuits over wage and hour violations. [New York Times, 11/19/04; Associated Press, 2/17/04; Associated Press, 9/19/05; Associated Press, 12/22/05.]

Wal-Mart's Wage and Hour Violations Thousands of employees have sued Wal-Mart for unpaid overtime and unfair break practices, so-called "wage and hour" suits. Download our fact sheet to learn more about these suits, former and present. (PDF)

• Hiring Undocumented Workers. Wal-Mart paid $11 million to settle a federal investigation called "Operation Rollback," which found hundreds of undocumented immigrants working off the clock to clean stores. In 2003, federal agents raided 61 Wal-Mart stores and arrested 250 undocumented immigrants. [Washington Post, 3/19/05; Los Angeles Times, 10/24/03.]
• Skipping Work Breaks. In 2000, an internal Wal-Mart audit found that of 128 stores, 127 of them were "not in compliance" with company policies providing for work breaks. [Indiana Lawyer, 5/7/03.]

Low Prices at the Cost of Wages?

Living Wage Policies and Wal-Mart: How a Higher Wage Standard Would Impact Wal-Mart Workers and Shoppers This study from the UC Berkeley Center for Labor Research and Education shows that higher wages and low prices can co-exist. (PDF)

Using Child Labor

Federal investigators found Wal-Mart complementing low wages with low ages:

• Employing Teens in Unsafe Conditions. In January 2005, after an investigation of 27 stores in three states, Wal-Mart reached a settlement with the United States Department of Labor for violations of the Fair Labor Standards Act. Wal-Mart paid a $135,540 fine for allowing 85 workers, aged 16 and 17, to participate in activities prohibited to minors -- "including loading and occasionally operating or unloading scrap paper balers, and operating fork lifts." Wal-Mart signed an agreement with the Department's Wage and Hours Division regarding future child labor conditions. [U.S. Department of Labor Press Release, 2/14/05.]
• Negotiating for Weak Enforcement. An audit by the Office of Inspector General (OIG) of the child labor agreement between Wal-Mart and the Department of Labor found "serious breakdowns in the WHD [Department of Labor's Wage and Hour Division] process for negotiating, developing, and approving such agreements. These breakdowns resulted in the WHD entering into an agreement that gave significant concessions to Wal-Mart. Specifically, the agreement provided for advance notification by WHD of Wal-Mart investigations, and gave Wal-Mart the ability to avoid civil money penalties (CMP) under certain conditions. In exchange, the agreement primarily committed Wal-Mart to continue measures that were already in place or required by law. Also, WHD did not consult with the Office of the Solicitor (SOL) in developing and approving the agreement."
  
  Connecticut Attorney General Richard Blumenthal said: "This report constitutes an unexpected and virtually unprecedented indictment of the U.S. Department of Labor's sweetheart deal with Wal-Mart. [It] should lead us to be more vigilant and vigorous in enforcing our state child protection laws." [U.S. Department of Labor, Office of the Inspector General, Office of Audit, 10/05; Hartford Courant, 11/1/05.]

What You Can Do

Ready to act for fairness for Wal-Mart workers?

• Join thousands in signing the Handshake with Sam agreement and calling on Wal-Mart to live up to its moral responsibilities
• Tell friends and family about Wal-Mart's responsibilities to workers -- and how the store falls short